One key question that caught my attention from recent discussions is how procurement will approach supplier relationship management (SRM) as cost pressure increases and certain markets continue to shift in favour of suppliers.
After a hectic and insightful few days at the World Procurement Congress, it makes sense to look at a few of the points that really stood out from the discussions. One key question that caught my attention is how procurement will approach supplier relationship management (SRM) as cost pressure increases and certain markets continue to shift in favour of suppliers.
I was lucky enough to be able to observe a lively roundtable regarding this very topic. The roundtable was titled ‘SRM: How to get more from your suppliers’ and below are three key points from the session that are important for the procurement community to know as it maps the future.
· Often suppliers know more about you than you know about them. In light of this slightly menacing statement, the importance of market intelligence was again underscored as a key tool required by the function to face SRM. Obtaining quality market intelligence will allow buyers to engage more effectively with the supply base.
· The definition and communication of supplier strategy was thought by the session’s participants to be an area of SRM which is currently seeing under-performance. The main goals and priorities of procurement teams in regard to their engagement with strategic suppliers are often not formally defined and written down. Not having a clear strategy clearly impedes a team’s ability to draw the best result from a relationship. The head of procurement for Sony also stated that communicating with suppliers about what the procurement team is trying to achieve can facilitate great collaborative power.
· SME suppliers will become an increasingly significant portion of the supply base. This is because SMEs are able to offer higher levels of flexibility and are now becoming the main source of industry innovation. As a result, going forward procurement will need to find more effective ways of engaging and working with SMEs in order to get the most out of their supply base.
For those in attendance, SRM is one of those issues where there is always room to improve and to drive value. Those taking part in these discussions will undoubtedly have their own views on how to develop capablities and hone their strategies, but there’s no question that there’s shared territory here and businesses that are willing to focus and invest in a carefully planned approach to SRM are able to realise measurable returns and not just a warm feeling from suppliers.
from Procurement Leaders Blog http://ift.tt/1HAyRpY
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The views expressed in this post and throughout the series are the autor's own and not intended to reflect the views the YQ Matrix platform, its users or any associated organisations.
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